Distributions - Employer Discretion

[Guest cphs]

Generally, an employer may not exercise discretion over the timing or form of a distribution. However, Treas. Reg. section 1.411(d)-4 Q&A 2(d)(1)(i) permits an employer to retain discretion to eliminate lump sum or installment payment options for benefits that are subject to the put option requirement of Code section 409(h)(1)(B). Does this mean that an employer simply has the right to amend an ESOP to eliminate these forms of distribution, or does this mean that the employer can exercise discretion regarding whether a specific participant can receive a lump sum or installments?

Stated differently, can the plan provide for lump sum distribuitons, but then reserve to the employer the right to make distribution via installments?